Economic Freedom versus Prison Population

Posted
on December 23, 2010, 6:30 pm

Mike Konczal has posted a great graph at Rortybomb that shows the relationship between “economic freedom” and incarceration in countries around world. He graphs the 2009 national prison population rate per 100,000 against the conservative Cato Institute‘s national “Economic Freedom” rating for 2007:

Source: Mike Konczal.

The graph shows a fairly strong positive relationship between a country’s level of economic freedom (as measured by Cato) and its incarceration rate. Roughly speaking, a 10 percent increase in “economic freedom” is associated with about a 12 percent increase in the incarceration rate. The results raise some big questions: Does “economic freedom” –at least as defined by Cato– somehow depend on high levels of incarceration? Do higher levels of economic freedom lead to higher crime rates, which lead in turn to higher incarceration rates?

But, what I think is an even more interesting feature of the graph is the behavior of the United States (the thick red line). Konczal has graphed not just the 2009 incarceration rate for the United States, but also the rates for 1970, 1980, 1990, and 2000.

What is striking is that as recently as 1970 and 1980, the United States was right in the middle of the pack when it came to incarceration rates, and was very close to the regression line that traces the average relationship between incarceration and “freedom.” In the decade between 1980 and 1990, however, the United States pulled well away from the pack. And by 2000 and 2009, the United States was in a class of its own (well, a class that also includes Russia and Rwanda in Konczal’s graph).

How is it that the United States has moved so far from the average trade-off between “economic freedom” and incarceration rates? Reading off the chart, between 1970 and 2009, “economic freedom” increased about 15 percent (from about “7” units of economic freedom to about “8” units of economic freedom). Following the average relationship spelled out in the regression line, we would have expected the incarceration rate to rise about 18 percent (on average a 10 percent increase in “economic freedom” is associated with a 12 percent increase in incarceration, so a 15 percent increase in “economic freedom” would be associated with about an 18 percent increase in the incarceration rate). But, instead of an 18 percent increase, we got roughly a 400 percent increase in incarceration! (From about 150 per 100,000 in 1970 to about 750 per 100,000 in 2009.)

Two explanations come quickest to mind. First, the “get tough on crime” attitudes that swept the country from the 1970s on (mandatory minimum sentences and “three-strikes and you’re out” laws, for example). Second, the “War on Drugs” –about 25 percent of the prison and jail population were found guilty of non-violent drug offenses.

(For more data on incarceration rates over time and across countries, see the report that Kris Warner, Sarika Gupta, and I did for CEPR last summer.)